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Turkish Officials Lash Out Against Bribery Claims in New York Trial

November 30, 2017 7:09 PM

Hulya Polat

Front pages are seen of some Turkish newspapers with headlines concerning a trial in New York against a Turkish banker charged with violating U.S. sanctions against Iran, in Ankara, Turkey, Nov. 30, 2017.

Turkish officials are working overtime to discredit testimony at a New York trial implicating President Recep Tayyip Erdogan and other top officials in a multimillion-dollar bribery scheme designed to help Iran skirt international sanctions.

The officials have described the proceedings as a "mockery" and "theater" aimed at overthrowing the Turkish government, even suggesting that Fethullah Gulen, a Turkish cleric living in the U.S. state of Pennsylvania, is "pulling the strings" behind the prosecution. U.S. officials and prosecutors strongly deny the allegations.

However, the trial has exacerbated the United States and Turkey's strained relations, which have been deteriorating since a Turkish coup attempt in July 2016. Turkey has been frustrated in its attempts to extradite Gulen, a one-time friend of Erdogan whom Ankara accuses of masterminding the coup.

At the center of the trial is Turkish-Iranian businessman Reza Zarrab, who was originally the most prominent of nearly a dozen people charged in the case. He could have faced up to 70 years in prison before he agreed to plead guilty to charges of money-laundering, bribery and evasion of sanctions.

Zarrab now is the prosecution's star witness against the only defendant in custody, Mehmet Hakan Atilla, the former deputy general manager of Turkey's state-run Halkbank.

"Cooperation was the fastest way to accept responsibility and to get out of jail at once," Zarrab told the court Monday. He testified that he continued to pay bribes even after he was jailed in the United States, paying guards for cellphones, liquor and women.

Using flowcharts to show how the deal worked, Zarrab testified Tuesday that he paid 50 million euros ($59 million) in 2012 to former Economy Minister Zafer Çaglayan as he sought to establish himself as the prime intermediary in lucrative gold-for-oil trafficking involving Turkish and Iranian banks that evaded U.N. and U.S. sanctions. He said he also paid off Mehmet Attila, a former deputy general manager at Halkbank and a co-defendant in the case.

On Wednesday, Zarrab testified that Caglayan had told him the illegal trade was approved by Erdogan, who was prime minister at the time, and former Economy Minister Ali Babacan.

Bekir Bozdag, Turkey's Justice Minister is pictured at the Presidential Palace in Ankara, April 16, 2016.

Criticism of case

Turkey has gone on an all-out offensive against Zarrab and the prosecutors in the case.

Deputy Prime Minister Bekir Bozdag told Turkey's Anatolia News Agency that the judicial process is a "plot against Turkey and President Erdogan," saying Zarrab had become "a false witness under duress."

"A theater is being staged in New York by the courts," Bozdag said.

Erdogan, for his part, denied any wrongdoing at a meeting of his ruling AKP party Wednesday.

"We have energy and trade relations with Iran," said Erdogan, who has moved his country closer to Russia and Iran in recent months. "We didn't violate the sanctions against Iran. Whatever comes out of this trial, we always did what was right. We didn't promise anything to the United States of America. The world doesn't consist of America only."

A day earlier, Erdogan angrily rejected allegations by Kemal Kilicdaroglu, leader of the main opposition Republican People's Party, that he and his relatives have used offshore bank accounts to hide ill-gotten wealth.

Erdogan accused the opposition leader and his party of "treason." "If you strike me, be prepared to be struck back," he threatened.

Kilicdaroglu said Erdogan's brother, son and executive assistant made transactions worth around $15 million to offshore company Bellway Limited in the tax haven Isle of Man in December 2011 and January 2012.

The Turkish government has cracked down hard on its critics and decimated what once was a free-wheeling media, jailing hundreds of journalists and opposition legislators.

The state-run media has carried virtually no coverage of the trial other than the government's charges of unfairness. Residents instead have been getting the news through international media online.